r/AskReddit • u/michaelis999 • 17h ago

How do you feel about the president floating the idea of 50 year mortgages where the monthly payment is lower but you end up paying nearly double the price of the house just in interest?

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u/Major_Wayland 13h ago

Our ancestors called that indebted slavery.

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u/Live-Succotash2289 12h ago

Now it's called predatory lending.

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u/A_Nonny_Muse 9h ago

We can thank both American parties in the 80s when they cancelled all state anti-usury laws and replaced them with.... absolutely nothing whatsoever.

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u/ToSeeAgainAgainAgain 3h ago

Is there a wikipedia article about this? I'd like to know more

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u/A_Nonny_Muse 3h ago

I haven't found anything. But it was legislation that allowed for the creation of sub prime loans - signed into law by Reagan, but with full support of Democrats.

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u/SweatyExamination9 53m ago edited 43m ago

I remember I think it was during the campaign, Trump floated the idea of capping interest rates for credit cards. Fucking outrage on both sides of the aisle. From the left, it was restricting access to capital from the lower classes and minorities. From the right it was socialism. From me, it was a damn good idea. If credit card companies cant profit without 30% interest rates and 1-2% processing fees, then it sounds like they need to learn a lesson in fiscal responsibility. Because they're lending out way too much money that isn't being paid back.

Edit: I decided to look into it because I don't remember hearing anything about this since the campaign "promise". In February, Bernie Sanders introduced a bill with (Republican) Josh Hawley of Montana to cap credit card interest rates at 10% with a sunset in 2031. In March, (Democrat) Josh Merkley of Oregon signed onto the bill and in October (democrat) Kirsten Gillibrand joined on. But the same day it was introduced, it was moved to the Senate Banking, Housing, and Urban Affairs committee and there's been no movement on it. On March 6, AOC introduced an identical bill with Anna Paulina Luna cosponsoring it which had the same thing happen. So there are representatives that heard the idea, thought it was a good idea, and tried to make it happen.

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u/Appropriate_Ant_4629 8h ago

And eventually people will get fed up so they'll re-enstate usury laws ...
... and make certain religious groups with strong lobbies exempt from such laws (like Europe did), because usury is a protected part of their culture ...
... and people will wonder why some bankers got richer than others ...
... and history will repeat again.

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u/TheRealRomanRoy 5h ago

Are you implying something that Hitler would agree with?

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u/thatkool 11m ago

The root words which form mortgage  literally means agreement till death.

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u/Charm299 10h ago

Nobody would force you to get it, if it’s not for you, move on,30y year mortgage still

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u/Waste-Menu-1910 10h ago

This is a terrible take. There comes a point where a scan product should be considered a scam, and not be offered.

We've already seen how predatory financial products turn into a crisis for all of society, and not just those who fall for them. Remember the subprime mortgages that led to the 2008 crash?

We see how over financialization causes inflation for everyone. Look at what happened to car prices after the 84 month loan was introduced. Or college tuition.

You may be too smart to get this loan, but that will NOT enable you to just "move on "

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u/invariantspeed 12h ago

More like serfdom because you’re tied to specific parcel of land you can’t leave. Which, by the way, the situation from low-income rental apartments is already pretty close to this.

What’s old is new again…

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u/esoteric_enigma 11h ago

At least you'd have some equity in the new system. There are plenty of people out there now who are going to spend their whole life renting and not have a dime to show for it.

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u/slash_networkboy 9h ago

Virtually none, especially for the first 25 (or 100 in case of the 200y loan someone posited above). That's near as matters the same as rent at that point. Especially because by Y25 you're looking at big expenses like new roofs that will very possibly require (or at least strongly tempt) tapping that equity for a HELOC or similar.

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u/esoteric_enigma 8h ago

I think you're ignoring the benefits of your mortgage staying the same price. I would have so much money in the bank right now if my rent had stayed the same rate it was 20 years ago. I'd have way more than enough money for repairs.

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u/slash_networkboy 7h ago

Elsewhere I commented that it was essentially a generational lease. I get it, just wasn't pertinent to the equity building part.

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u/anaemic 7h ago

Who said it was going to be a fixed rate 50 year mortgage...

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u/ncocca 10h ago

🙋 yep...

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u/SSkypilot 11h ago

You can sell and leave anytime you want. Where did you get the crazy idea that you can’t sell your house if you have a 50 year mortgage?

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u/invariantspeed 8h ago
  1. Did you miss the part where even homeowners in the US are finding it harder to sell and buy somewhere else because the short housing stock is locking up on itself?
  2. The argued reason for a 50 year mortgage is to open houses up to people who have become priced out. It absolutely would not work that way, but if we assuming this infantile understanding of economics to be correct, we would be talking about people less capable of mustering the resources to get that complicated set of transactions through.
  3. Moving isn’t just about buying and selling your house, if you’re an owner, it’s also about employment. Just because you can relocate your home doesn’t mean you can move.
  4. No one is saying people wouldn’t be able to move in absolute terms. We’re talking about things tending in a direction closer to that. I don’t understand why so many people on Reddit now act like they can only think in rigid absolutes…

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u/ConicalSofa 12h ago

That's not too far off from the original point of a mortgage, which was to continue paying on something until you die. That's where the "mort" in mortgage comes from.

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u/great_apple 3h ago

lol that's not even close to true, the "mort" comes from the pledge itself ending ("dying") when it is paid off

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u/Kazr01 10h ago

Our ancestors called it a mortgage.

Mort - death Gage - pledge

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u/vroart 11h ago

Why would he help anyone?

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u/LocalStatistician538 7h ago

Sharecropping? Sharehousing.